U.S. Tariffs and Canadian Retaliatory Measures: What this may mean for your business
Updated: May 23, 2025
Click here for Canada’s response to U.S. tariffs
On April 2, 2025, the American government announced a slew of new “reciprocal” tariffs on nearly all of its trading partners. While Canada was spared from any new tariffs, we are still under 25% steel and aluminum tariffs, 10% energy tariffs, tariffs on non-CUSMA compliant exports and new 25% auto tariffs.
In response to these tariffs, the Canadian government imposed the following counter tariffs on:
- March 4th: Canada imposed tariffs on $30 billion in goods imported from the United States, including orange juice, peanut butter, wine, spirits, beer, coffee.
- March 13th: Canada imposed tariffs on an additional $29.8 billion in goods imported from the United States, including steel and aluminum products as well as tools and cast-iron products.
- April 9th: Canada imposed tariffs on non-CUSMA compliant vehicles imported into Canada from the United States and non-Canadian and non-Mexican content of CUSMA compliant vehicles imported into Canada from the United States
If you have questions about CUSMA compliance, the Trade Commissioner Service now has a direct phone line to support you. Please call 1-833-760-1167 | Monday to Friday, 7 a.m. to 8 p.m. ET.
For more information, visit: Understanding CUSMA/USMCA compliance
Tariff Remission Support for Food and Beverage Packaging
Based on feedback from industry groups including Restaurants Canada, the government is providing temporary 6-month tariff relief for goods imported from the U.S. that are used in food manufacturing and processing as well as food and beverage packaging, among other categories. The remission is time-limited to provide businesses additional time to adjust their supply chains and prioritize domestic sources of supply if available. For more details on whether your business is eligible, please consult the Customs 25-19 and/or speak with your legal counsel.
What Changed and What It Means for the Food and Beverage Industry
On May 20, the Canada Border Services Agency (CBSA) provided revised guidance on the application of Customs Notice 25-19, which had introduced an automatic relief process for eligible importers in food manufacturing and processing as well as the food and beverage packaging sector.
Importantly, automatic remission is restricted to industrial manufacturing activities (NAICS 31–33) and excludes goods used in primary production (like farming), construction, or food preparation in retail or restaurants. Packaged food products themselves (unless it meets the separate requirements related to imports for goods used in manufacturing or processing) and goods imported for packaging animal food are not eligible for remission.
We encourage importers of record to consult with their legal counsel to assess potential impacts and determine continued eligibility.
Full details of Customs Notice 25-19 and the most up-to-date guidance can be found here.
Industry Impact & Our Advocacy Efforts
Restaurants Canada, in collaboration with industry partners, continues to push for exemptions on a select list of critical food products, including:
- Lettuce
- Tomatoes
- Potatoes
- Pork
- Food-safe packaging
- Cleaning products
Mitigating the Impact
While economic pain may be unavoidable, Canada’s approach seeks to minimize its duration. In addition to lobbying against harmful tariffs, we have also advocated for:
- Exempting all food from sales tax, as it was during the GST/HST holiday — keep an eye out as we ramp our Food Tax Fairness Campaign.
- A wage subsidy program to keep employees connected to their workplaces and prevent job losses.
- The removal of interprovincial trade barriers to help businesses adapt and recover.
- Manufacturing credits to enable food and packaging manufacturers to expand production quickly.
- Broadening the interpretation of food manufacturing and processing to include food processing that occurs in the food service sector (restaurants) as part of Customs Notice 25-19.
- Loosening regulations around packaging requirements from out of country products that may be substitutes for American-made products.
Our Work
Restaurants Canada is working closely with the federal government to address industry concerns, highlighting our sector’s role as the fourth largest private sector employer and its significant impact on industries like agriculture. We have joined the Canada-U.S. Trade Council, a group of industry associations and organized labour across impacted sectors to share information and develop policy recommendations.
In March, we were in Washington, D.C. for a Tariff Trade Mission, collaborating with other business associations to push back against these damaging policies. This trade mission helped garner support from U.S. Congress and Senate members, build ties with other allies in the U.S. and ensure conversations about tariffs in Washington include considerations for the restaurant industry on both sides of the border.
We are also meeting with key cabinet ministers and provincial governments to discuss the impact of these tariffs and explore mitigation strategies, including removing interprovincial trade barriers, so Canadian businesses have more options to source products domestically. We’re discussing the financial impact of bans on U.S. alcohol products with provinces and pushing for larger wholesale alcohol discounts to offset rising costs.
We will be headed to Ottawa shortly to meet with government officials and stakeholders to ensure that existing and future remission processes and other tariff-related programs provide the necessary resources to support the foodservice industry.
Throughout the summer, we will be ramping up our Food Tax Fairness campaign, calling on the federal government to permanently extend the GST/HST holiday for restaurant meals and alcohol. This policy has been instrumental to our industry navigating the economic challenges of the last six months and has the potential to ensure that Canada’s restaurant and foodservice industry can continue that momentum, creating more jobs and serving as a vital anchor for communities nationwide.
We will continue to keep you updated as this situation evolves. Please see below a list of FAQs and resources to help guide our industry through this uncertain time.
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FAQs
The Canadian government is levying 25% retaliatory tariffs on the following U.S. food products that directly affect the foodservice industry:
- Fresh and frozen poultry
- Fresh produce (including leafy greens, berries, peppers, tomatoes, and onions)
- High proof spirits and wine
- Canned and frozen fruits and vegetables
- Processed seafood
- Juices
- Boxed beef
- French fries and sweet potato fries
- Tortillas
- Dressings
- Glass and counter cleaner, dishwasher chemicals, and bleach
- Stainless steel cookware and foodservice equipment
- Industrial appliances and machinery used in foodservice operations
A full list of targeted goods can be found here.
A list of steel and aluminum targeted goods can be found here.
No. According to CBSA, the remission order is explicitly limited to NAICS codes 31 to 33 (manufacturing), and restaurants are specifically excluded. The government is evaluating if more remission orders are necessary, especially in cases where importers cannot find viable alternatives to U.S. suppliers, and where supply chains have not adjusted post-tariff.
Companies are expected to self-assess and maintain books and records to support their claims. Auditors will review traceability, including the importer’s use of the goods, their manufacturing processes, and the reasoning behind their remission claims. Importers who claimed the remission in error and corrected their claim within reasonable timeframes are not penalized, but repeated mistakes or intentional misuse may trigger enforcement or penalties.
All provincial and territorial governments have stopped purchasing U.S. alcohol products and all except Alberta and Saskatchewan have removed current inventory from public liquor board sales. Retailers in Saskatchewan and Alberta will be allowed to sell U.S. alcohol products until their inventories are depleted. Provinces and territories are also excluding U.S. companies from new procurement agreements and potentially cancelling existing contracts.
Restaurants Canada has urged the government to provide wage support to impacted workers as it did during the pandemic, in order to protect Canadian jobs. The federal government has now expanded the EI Work-Sharing Program to cover more types of businesses and workers for a longer maximum duration.
The Work-Sharing Program allows employers to reduce employees’ hours in response to an unexpected reduction in business activity and use EI benefits to offset lost wages. To learn more about eligibility requirements and the application process, visit the Government of Canada’s Work-Sharing Program page or contact your nearest Service Canada office.
The government has also reduced the minimum number of work hours required to qualify for EI, increased the weeks of entitlement by up to four additional weeks, and waived the waiting period so workers can access EI in their first week of unemployment and regardless of whether they have received severance or not. These are temporary measures for now.
The government has also indicated that all revenues collected from its retaliatory tariffs on U.S. vehicles that are not CUSMA-compliant will be returned to the Canadian auto sector.
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The Government of Canada has announced new retaliatory tariffs on certain U.S. products, effective March 13, 2025.
